What is the next challenge for Sir Ralph Norris?

Sir Ralph Norris has been chief executive of three companies (ASB Bank, Air New Zealand and Commonwealth Bank of Australia) in two decades. His name is invariably linked to any references to CIO to CEO ascent in this part of the world.

Sir Ralph Norris has been chief executive of three companies (ASB Bank, Air New Zealand and Commonwealth Bank of Australia) in two decades. He picked up a knighthood in 2009, and was Australia’s highest paid CEO at the time of his retirement from CBA in late 2011.
His name is invariably linked to any references to CIO to CEO ascent in this part of the world.

So what’s next? “Well, I am now obviously concentrating on directorships, I am also doing some mentoring, and pro bono work in the charitable sector,” says Norris, who started his IT career as a computer programmer at ASB.

He is mentoring two chief executives as well as two “younger executives”. They have all approached him and will remain unnamed, with Norris describing one of them as the CEO of one of the largest accounting practices in New Zealand, while another works for one of the major banks.

He names two community organisations he is involved in — the Juvenile Diabetes Research Foundation Advisory Board and The Parenting Place.

He is also a member of the Council for the University of Auckland. He says the council’s governance structure is very similar to a board of directors. “It is making sure that the organisation is like any organisation, preparing itself to meet the needs of today and also very importantly the future, making sure it is appropriately resourced.”

“If I look back over my career it has been characterised by change,” says Norris.

“Change is something that has been going on in perpetuity. But I think it is important that we realise that change has probably accelerated in the last 10 years and as a result of that it is important that companies have processes and structures that facilitate agility and nimbleness within the organisation.

“Organisations that are hidebound, that are resistant to change are businesses that are in my view on the edge of extinction because there is no doubt all companies have to be able to adapt, have to evolve, if they are not, they are in big trouble.”

So what about companies that made it — or did not make it as a result of changes?

Norris again looks back at the history of companies, and points out the biggest number of casualties in an industry that is expected to be the most prepared for change — information technology.

The likes of DEC, Prime and Wang failed because they did not see the advent of the microprocessors, and more importantly, he says, what it could do in “obsoleting their businesses”.

He cites companies like Kodak which had invented the digital camera, but which also caused its demise. “They didn’t move fast enough to exploit the technology that they invented.”

“Those industries that are based around technology are the ones that haven’t faced up to the challenges as well as say, older industries.”

And to this he refers to an industry he is familiar with, having been CEO of two such institutions.

“Banks are among the oldest industries in the world,” he says, “many were founded up to 300 to 400 years ago and we have local banks that have been around in excess of 150 years, almost since the time New Zealand was founded.

“If you look at the banking industry, your first reaction would be that banks are staid, they are slow, and don’t adapt and evolve. But they have adapted and evolved tremendously from being ‘ten in the morning to three in the afternoon’ institutions, to 24x7 institutions,” he says.

“They have come through significant innovation over the last 20 to 25 years which has given them the opportunity to continue to compete strongly.

But even then, the banks face new competitors. “That is going to be an interesting dilemma for many banks over the next decade. Are they well equipped from an information technology perspective to be able to compete against a new range of competitors?”

Futurist and inventor Mark Pesce on larger companies competing with leaner startups moving in on their turf.

For example, a significant advantage for many banks has been the strength of the branch networks, he says. But these branches could end up as an Achilles’ heel.

“We are going to see a generational change taking place from the point of view of bank customers who are much more paying, operating in a virtual world rather than real branch network world.”

“It is really important for banks to be evolving and adapting its systems to make sure they are in a position to be able to compete against new competitors.”

The new competitive environment

An increasingly interconnected environment has also led to the need for competitors to work together, Norris says.

In Australia, for instance, the falling volume of cheques saw the banks work together to aggregate their cheque processing through a common company rather than doing it independently. Another system owned equally by the banks facilitates payments to utility companies.

He says this arrangement can be seen through Paymark, the largest Eftpos network in New Zealand which was set up by the banks, and through the ability to have ATM reciprocity across the board.

“It makes sense where you can get volume and common set of standards and you can reduce industry costs, then I think partnering with your competitors is a very good idea,” he says.

He has a message for companies implementing projects with major technology components — to make sure they put their very best people in those projects, and have executive sponsorship, from the CEO all the way to the senior executives responsible for the business units that are going to benefit from the project.

“They are business projects, so you have to have your best business nous,” he says. “Make sure you have got good business people playing their part in making sure those systems are going to work with what they need.”

“Often, you find companies don’t necessarily put their ‘A-team’ of business people in to help with a new systems implementation,” says Norris. “They usually put their B- or C-grade players there to assist with the testing, at the defining of requirements, scoping and things like that.

“My view is it is really important if you want the implementation to be successful, that you put people on the project who are actually [experts] in the areas they are coming from.

“You want your stars being committed for a period to make sure that implementation is a first class one.”

“I have seen many disasters over many years of organisations that bought packages and tried to customise them. They might get away with it in the first release but subsequent releases become hell.”

Thus a “cardinal rule” in organisations he has led is this: “When we buy packages we implement the package as it is designed.”

In any environment, collaboration and cooperation among the management team are critical factors, regardless of their roles, he says.

“If you have a group of executives that are not unified by a common set of objectives, then you risk people setting their own agendas and losing the power of that unity to actually drive that organisation’s planned path and achieving common strategies.”

He then zeroes in on key roles played by C-suite members, particularly the CFO and CIO to the organisation’s success. The CFO is not just a numbers person, he says, but also the navigator to pilot the CEO.

“It is probably a poor analogy, given the navigators are redundant in flight, but CFOs will never be,” he says.

Today’s CIO, meanwhile, is not just a “techie, but a strategist, a leader, and innovator, and critically, a good people manager”.

Norris says he may be biased on this issue, but points out that the CIO should be reporting to the CEO, given the stakes these days of IT in operational strategy and benefits that can be gained through technology.

CIOs and CFOs need to work closer than ever, says Andre Mendes director, technology, services and innovation, Broadcasting Board of Governors in Washington DC. "Technology is the big unifier that will make both of you successful," says Mendes, in this interview with CIO New Zealand during the CFO Summit 2013 in Auckland.

Transportable skills

Project management skills are critical in the industry, and especially for technology professionals wishing to branch out to general management roles.

People that come from an IT background who want to become broader based executives have to understand that IT is a business enabler it is not just IT for the sake of IT, says Norris.

“If you want to be able to move from IT into the mainstream business you have to prove you have very good project management skills. That means you have been able to deliver projects on time and on schedule and critically, have been able to demonstrate that you are a good influencer.

“That you can influence people, that you can actually build teams and that you can lead teams well because it is those attributes that are very transportable to different parts of the business.

“If you have got those skills, you are able to then, I think, move to a broader based business role, you could demonstrate that you are able to manage, lead and inspire.”

Facing up to customers, media, staff and even restless shareholders is a reality for today’s top executives. When crisis strikes, “tell the truth upfront,” says Norris.

“That, from my experience, produces the best results,” he says. “Don’t try and fudge the issue, don’t try to minimise the issue.”

“Be honest about what has happened, and what you are doing about fixing it. If you let customers down, don’t be afraid to tell the truth.”

So what was his most significant challenge? After a brief pause, Norris says, “It has always been people”.

“Organisations stand or fail based on the quality of the people inside the organisation,” he says. “The toughest decisions I have had to make are around people and when you are making people redundant or dismissing them for poor performance.”

More so, he says, when one inherits a team. “You have got to make some pretty tough decisions.”

“Those are not easy conversations but are the conversations you have to have. And I would say any executive who finds those conversations easy should look at themselves because,” he pauses, “it is a question mark about their ability to affiliate and have affinity.” Photos by Jason Creaghan

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